Finished the “ceiling”. Make expanded health insurance assistance permanent.
Allen Zutz has seen firsthand how much more affordable health insurance has become for many northern Minnesotans after what he calls “the cap” was lifted.
Zutz is a health insurance broker based in Bemidji. What he’s referring to is the upper limit of income eligibility for Affordable Care Act financial assistance that instantly lowers monthly premium costs for those who buy health insurance on their own. In 2021, Congress temporarily lifted this eligibility cap.
Prior to this, young retirees and farming families in particular often earned slightly too much money to qualify for support, leaving them to stretch out to pay for coverage or even go without. After the change, discounted premiums fit more comfortably into a budget.
“The people we’ve helped over the years who didn’t get any tax credits, when that cap was removed and they suddenly have money available in their budget instead of everything their money going to health care, that’s pretty powerful,” Zutz said.
Unfortunately, the old cap capping eligibility for this assistance at 400% of the federal poverty level — $69,680 for a two-person household, for example — is about to go back into place unless Congress doesn’t. act. The enhanced ACA aid and its expanded eligibility were included in the US bailout bill passed in 2021. But it came with an expiration date looming far too soon: December 31, 2022.
Remedy is needed to continue to help those who are struggling to subscribe to the individual insurance market. It serves those not covered by an employer or public programs such as Medicare – including farm families, entrepreneurs and young retirees. About 3% of Minnesotans, or 163,000 people, buy a health plan this way
Costs in this market can be daunting because there are no employers to subsidize the cost of a plan, a key benefit of obtaining coverage through employment. This is a problem that many people in their early 60s struggle with.
Eligibility for Medicare, the federal program for seniors, generally begins at age 65. But many people leave their jobs before then, sometimes due to layoffs or health issues. They still need affordable, quality coverage, which can be hard to come by.
For example, monthly insurance premiums for a two-person household in southwestern Minnesota with an income of $70,000 could be $1,504 per month, according to a scenario provided by MNsure. This is the state-run health insurance market and the only way to access ACA assistance.
Before Congress temporarily lifted the income cap for ACA grants, this couple would have done too much to qualify for ACA grants. But without the cap, this couple could qualify for $1,046 a month in assistance, leaving them with a monthly bill of $458.
The National Academy for State Health Policy is sounding the alarm over the reinstatement of the cap. He estimates that 69,515 enrollees in Minnesota will have their aid reduced or eliminated. Net enrollee premium costs could rise by 30% to 40%, with “sticker shock” beginning in October when renewal notices arrive for 2023 coverage.
Congress is aware of this problem and efforts are underway to permanently end the revenue cap. The price to pay: $24.8 billion per year over the next decade.
Finding a way to offset that cost rightly seems to be the key to eventual congressional approval. One potential avenue offered by Democrats is to take advantage of savings from prescription drug cost reforms the party is pushing for.
The U.S. bailout cut health care costs for ‘70,000 Minnesotans…and we did it without a single Republican support vote. Now, with families stressed by rising costs, we should give those savings back permanent,” said Senator Tina Smith. , D-Minn.
In Bemidji, Zutz noted that the ACA’s expanded assistance doesn’t just benefit the eligible household. There are also positive ripple effects on businesses, when consumers have higher disposable income. Said Zutz: “The economy needs them to have money to buy other things.”